Costco piles up corporate gold by sending customers on a hunt for hidden treasure.
When Cherie Lydick moved to Jacksonville, Florida, several years ago, she faced an immediate crisis. The closest Costco superstore was in Orlando, almost 200 miles away. "And we love Costco," says Lydick, who is married with two teenage children and owns a small marketing and public relations firm. "You name it, we've bought it at Costco - diamonds, pool and office supplies, toilet paper, groceries."

So what else could she do but drive to Orlando three or four times a year to stock up? "We'd just pile our car full of stuff and drive back."

Which doesn't make Lydick unusual or eccentric or even a bit off. It makes her a fairly typical customer of a very unusual company. Costco is more than just another warehouse club, and President and CEO Jim Sinegal is more than just another corporate executive. Yes, Costco aisles are packed with pallets of paper towels and commissary-size cans of tomatoes, but they also display fine jewelry, high-end mountain bikes, and plasma TVs - all part of what Sinegal calls Costco's emphasis on value, not on price.

If price takes a back seat to value, then it's not a Wal-Mart kind of operation - which may explain why Costco is the biggest warehouse club chain in the country and Wal-Mart's Sam's Club is a not-an-especially-close second. "Wal-Mart [Stores] likes to pride itself on being the most efficient retailer in the world, and they are the standard everyone is measured against," says Dan Graham, a retail consultant with Dechert-Hampe. "And Costco does a better job than Wal-Mart. So what does that say about Costco?"